In this part, we’ll compare Cimarex Energy’s (XEC) recent stock movement with respect to movements in the broader market, crude oil prices, natural gas prices, and the US Dollar Index, or USDX.
As we saw earlier in this series, XEC’s stock has fallen by almost 3.5% YoY (year-over-year). By comparison, peers Concho Resources (CXO) and Continental Resources (CLR) have fallen by 1.3% and 9.5%, respectively, YoY.
Recent trends in XEC stock
Recently, XEC stock has been on an uptrend, mirroring crude oil and natural gas price movements. But the correlation coefficient between Cimarex’s stock price and WTI’s (West Texas Intermediate) price (USO) from June 2015 to the present is ~0.66. This indicates a strong positive correlation between the two.
The correlation coefficient between Cimarex’s stock price and the price of natural gas (UNG) from June 2015 to the present is ~0.11. This also indicates a positive but far lower correlation between the two.
The above graph shows that XEC stock has produced higher returns than natural gas and WTI on a YoY basis. When compared to the broader market, or the S&P 500 ETF (SPY), XEC has clearly underperformed. SPY has returned -0.51% since June 2015.
Please note that XEC is negatively correlated to the US dollar index. Since June 2015, USDX has returned about 0.11%.
In the next and final part of our series, we’ll explore what institutional holders see in XEC in addition to short interest trends in the stock.